The supply chain network are spent a great deal of time, effort and money in developing a collaborative network of partners supporting supply chain demands. This network of partners has evolved into the current state collaborative network that encourages and supports partners to develop a high level of specialization to support specific supply chain needs. These specialized partners can be very successful within the collaborative supply chain network where the interesting aspect of the network relationship and the level of specialization in some cases would probably cause the partner to fail and disappear outside of the collaborative network. The retail market has also moved into the direction of the collaborative network and the experiences and lessons learned by supply chain partners in developing and growing a similar supply chain network can be very beneficial to the retail marketplace network.
Amazon has developed a collaborative marketplace and based on services offered and span of partners participating in this market it appears that Amazon has a strong lead in this area. I believe this is because Amazon has spent years developing the framework and platforms that supports open collaboration across partners, whether consumer or supply chain partner, including all aspects of the supply chain from the supplier to the consumer. These efforts and developments have prepared the way for Amazon to provide a retail collaborative network to the consumer. Amazon, I think, realized a long time ago that their storefront did not need to supply all products and services themselves but it is important to provide the ability to obtain all of the products and services. This is interesting to me because it seems that Amazon modeled their vision after the Wal Mart retail store model to provide everything a consumer wants under one roof, where the Amazon ‘roof’ is virtual. This virtual model though allows Amazon to provide unlimited aisles of products and services because there is no limitation on real estate in the virtual world.
Many retailers have provided the ‘endless aisle’ concept in their eCommerce site with various, degrees of success, through drop ship programs. Amazon has simply extended that concept manyfold through a robust sort front platform. Amazon has been working on the storefront concept for a long, long time first I think out of necessity and then realizing the power of the concept they began to expand and extend the framework to the point now where they are advertising as a strategic initiative to support and extend the capabilities of their small retail partners. In my opinion, this is the key to their strategy and their key to future success, they have brought to the broader market the concept and reality of a collaborative marketplace that extends the Amazon brand and reach through a mutually beneficial collaborative storefront.
This is the next retail marketplace disruption and while the technology can be acquired by anyone, especially the large legacy retailers, the concept of the collaborative marketplace requires a culture change to implement. The large department stores have similar concept where major designers and brands have their own mini storefront this is still owned and controlled by the department store. There is no collaboration involved in this concept, fact even the areas that would provide the opportunity to collaborate are rebranded and fronted by the retailer. The legacy retailers first must focus on collaboration and how to build the collaborative framework that extends from the manufacturer to the consumer with connections and actual two way communications and collaboration across the entire network. The retailers must change their culture from one of command and control that waits for a concept to be proven before the embrace to a nimble collaborative culture that encourages experimentation and failure. In this new world, failure is an important concept and method to move forward and this is a concept that the large legacy retailers must embrace in order to survive the disruption.
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